Eric, a second-semester senior, is looking for a job. Anxious about finding work in the worst economy in decades, he sends out scores of resumes for a wide variety of positions. The first call he gets is for a position that doesn’t really interest him, but he figures he should be open to every opportunity. He schedules an interview, which he aces. In fact, the recruiter offers Eric the job on the spot. He would like Eric to start as soon as possible. Should Eric accept the offer? If he does, can he continue to pursue other jobs actively? Here are some resources that may help: CASE STUDY #2.
The Case of the Reference Request By Jim Balassone A former employee who was fired due to poor quality work, absences, and lateness related to her drinking problem, informs you that she has applied for a position at another company and has already given your name as a reference. She desperately needs a job (she is a single parent with three children), and she asks you to give her a good recommendation and not mention her drinking, which she assures you is now under control. She also asks you to say that she voluntarily left the company to address a family medical crisis, and that the company was pleased with her work.
You like this person and believe she is a good worker when she is not drinking. You doubt that she really has overcome her drinking problem, however, and you would not recommend your own company hire her back. ? What do you say to this woman? ? What do you say to an employer who calls you for a reference? ? What if the prospective employer was a friend? ? Suppose the problem was a theft? ? Suppose she had asked you to be a reference prior to supplying your name to her prospective employer? ? What values are at stake? Do some of the values conflict with one another? CASE STUDY #3.
Easy on the Wallet or Easy on the Earth: A Case About Ethics in Sourcing By Meghan Skarzynski Fashionforward! is an online auction site where those who have more style than money can bid on designer apparel. The site registers members for $30, who are then allowed to bid on exceptional deals. In an effort to stand out from the crowded field of online bargain sites, Fashionforward! reached out to the local community in search of help marketing their company to college students. Part of this effort included hiring a student intern, Carly LeBlanc. At that point, Fashionforward!
had no formal marketing strategy for targeting consumers. As someone who grew up in the digital age, LeBlanc knew she had to kick start the company on the Internet. Her marketing knowledge centered on the benefits of viral technologies, especially Facebook and Twitter. LeBlanc immediately revamped the Fashionforward! Facebook page to make it more user-friendly–adding quizzes, polls, discussion boards, and photo albums–as well as setting Twitter blasts to go off repeatedly throughout the day. During her three-month internship, LeBlanc quadrupled the Fashionforward!
Facebook fan base. Her project helped catapult the company into prominence. In the three months of her internship, Fashionforward! increased the number of items offered on the site threefold. The CEO noticed LeBlanc’s success in social networking and asked her to launch a guerrilla marketing campaign on her own campus to create buzz for Fashionforward! among her peers. The CEO challenged her to register 100 new clients within the week. A member of a sorority since her freshman year, LeBlanc decided to use her Greek connections. She appeared at four campus sororities that week.
Promising a free Fashionforward! T-shirt with the sorority’s name for every membership purchased, LeBlanc registered 300 new members in one night. Reporting to work the next day, LeBlanc was excited to share with the team the quick acceptance Fashionforward! had received on campus. She believed she had developed an easy and effective marketing strategy that could be replicated at schools all over the country. LeBlanc planned to order different T-shirt designs for different sororities, highlighting the Fashionforward! logo in bold lettering.
That’s when she faced a difficult ethical decision: She could order the shirts from a low-cost company in China or she could order them from a fair-trade company in San Francisco, which provided safe conditions and higher wages for the workers who made the clothing. The fair trade shirts were $28. 65,making the grand total for her project $8,595. In contrast, the Chinese T-shirts were $5. 50 each, and the company’s Web site promised fast and free delivery for a grand total of $1,100. LeBlanc remembered from her Venture Capital Finance class that startup companies need to focus on making the most money during the first two years.
She also knew that the T-shirts from China would be cheaper so that she could create a more elaborate design with more graphics and color. She realized her school was a “testing campus” for Fashionforward! and that if her marketing module worked, her internship work would spread to other college campuses. She thought of how easy it would be for a factory in China to produce large quantities of shirts to give away for free as a promotion that she could promote on the Facebook page she had worked so hard on. She also wondered if the higher cost of the T-shirts would affect the grade the CEO gave her for the internship.
On the other hand, her International Management class had exposed her to the harsh reality of working conditions in China: low wages, rigorous work schedule, poor safety regulations, and the complete lack of worker’s compensation and benefits. When LeBlanc had sailed on the Human Rights and Social Justice Voyage with University of Virginia’s Semester at Sea, she saw first-hand a Bulgarian clothing factory’s destitute environment. She wasn’t sure how the public would react if they knew Passionita had taken advantage of outsourcing cheaper t-shirts rather than supporting a U.S. company during the global recession.
Then LeBlanc weighed her other option of ordering t-shirts from a San Francisco T-shirt company she had already used once when she worked with a community service student organization. While the shirts were more expensive, they were fair-trade, organic, and eco-friendly, all attributes she thought would appeal to students. LeBlanc reasoned students would be more likely to wear a shirt that was fashionable and better quality than one that was made cheaply. LeBlanc didn’t want to disappoint her boss.
She knew she was working on a deadline and didn’t have time to research the prices of T-shirts at other companies. Even though she could have created a bidding war with local T-shirt companies for the business, she preferred to buy from a company that she could trust. At the same time, the $7,495 she would save if she bought from the Chinese manufacturer was too good not to consider. She knew if she made her boss happy, she’d be promoted and enjoy more independence with her future projects. LeBlanc wants Fashionforward! to increase its popularity and become a topnotch company among college trendsetters.
What should she do and why? * Should she quit her internship and drop the class? * Should she ask for an extension on her assignment? * Should she order the T-shirts from a fair trade company? * Should she assume the Chinese company doesn’t treat its workers fairly? CASE STUDY #4 Trust during the Dot-com Boom By Jessica Silliman Reyna Allen had her pick of jobs upon graduation as a communication major from Santa Clara University. She and her friends were graduating at what seemed like the perfect time-at the height of the dot-com boom.
But Reyna’s professors had warned her about possible problems in the rose-colored job market. Though the demand for workers far outweighed the supply, thus creating high salaries for those just starting out, many companies, her professors predicted, wouldn’t make it in the long term. At one particular dot-com upstart in Silicon Valley, Reyna was pursuing an entry-level corporate communications position. But she had the sense during the interview process that the company wasn’t going to make it; the product they provided lacked innovation and the company wavered in its organization.
Reyna saw them as just another boom-era company that may last awhile before going under. Despite what she thought, the company gave her an attractive job offer and aggressively pursued her once the offer was on the table: over the two-week period when she had to decide whether to take the offer or pass, they routinely sent her flowers and, after one week, upped the original offer. After Reyna received the better job offer, she received a call from one of the major venture capitalist firms that was funding the dot-com. This top-tier VC firm said that they were giving the dot-com full funding for the fourth quarter.
The company hoped that reassurance from the VC firm would help pull Reyna into the dot-com. This information changed Reyna’s mind. She figured that if they were continuing to get funding, then maybe the company could survive past the one-year mark. Reyna took the job. But after just a week in the office, she realized the other employees were incompetent. In the interview process Reyna was exposed only to the hiring team and didn’t get a chance to meet the other employees. But she quickly saw that they were inefficient and lacked motivation. Nobody ever seemed to be working.
Three weeks later, nearing the beginning of the fourth quarter, the company came within inches of not getting their next round of funding from venture capitalists. Reyna felt betrayed by the venture capitalist firm that gave her initial hope. Though they had told her they would be giving the dot-com full funding, they, in actuality, only gave a small amount for the quarter in which they promised full funding, causing the company to inch closer to bankruptcy. Just weeks later, the CEO of the dot-com suddenly moved to New York and the whole company shut down.
Reyna was without a job after only two months with the organization. After just getting settled, Reyna had to learn a quick, hard lesson about the dot-com industry. She was back on the job market. “In Silicon Valley, people say what they need to say,” said Reyna. Discussion Questions: * Was Reyna treated fairly in the situation? * Was the venture capitalist firm ethically wrong by lying about the amount o f funding? * Is it Reyna’s fault for not looking into the company or is it the company’ s fault for misleading Reyna? CASE STUDY #5 (SHOULD COLLABORATE WITH #6) The Case of Bad News.
The new CEO of a corporation learns that he has inherited problems with growth and profitability. A four-day workweek and, eventually, layoffs prove necessary. Who is the CEO obligated to inform and when? By Gil Amelio Responding to a Business Downturn George Anderson was just a few months beyond his 40th birthday on the day he became CEO of Astratech Communications International (ACI). What an upper! He was still basking in the glow of his good fortune, eager to try out his skills as the CEO. He hoped to get the chairmanship one day when the company’s founder, Mike Marcus, decided to step down. Life was good.
ACI was a leading supplier of fiber optic transceiver components for the telecommunications industry. It sold to companies like Alcatel, Northern Telecom, and Ericsson, who put ACI’s components into the lightwave equipment they manufactured. The company was based in Irvine, Calif. , a great place to live, work, and raise a family. ACI’s annual sales were around $500 million with 2,500 employees in locations in Mexico and Scotland, in addition to its Southern California headquarters. All of ACI’s hourly employees in the United States and abroad were represented by the IBEW, a union with a history of good working relationships with management.
The Mexican operation was launched to take advantage of lower labor costs and close proximity to headquarters. The Scotland plant gave the company relief from onerous European tariffs. Both offshore facilities enjoyed excellent employee relations. After settling into his new position, George busied himself identifying the major issues facing the company. Coming in, he had realized that ACI’s growth and profitability were problems, but he wasn’t sure if the source was the management team, product development, marketing and sales, or something else. After several months, George was clear that it wasn’t the people.
Sure, there were a few problem areas, and some employees seemed a bit too comfortable. But the main issue was a lack of focus and a general weakness in the business systems required in this fast-paced industry. There was no clear vision of what ACI wanted to be and no acceptable plan on how to get there. What was it that someone said? “If you don’t know where you are going, all roads will lead you there. ” To address this weakness, George implemented a task force made up of middle managers from all the various disciplines, as well as the executive team.
He chaired the task force because he believed strongly that CEOs shouldn’t delegate strategy. When it came to business systems, the problem seemed to be a lack of adequate cost accounting. The company didn’t know its individual product costs to any reasonable degree of accuracy. To address this challenge, George brought in a new chief financial officer. But just as George was beginning to feel optimistic about where ACI was going, he got a phone call from sales to tell him that Alcatel was canceling its backlog. Apparently, Alcatel’s customers
were slowing their acquisition of new equipment, and Alcatel seized that opportunity to shift all of its business to a French competitor of ACI’s that had a reputation for higher product quality. George’s first call was to the chairman. To his surprise, Mike handled it well, voicing his empathy and support. But clearly, George was expected to take action quickly. He decided that one way of avoiding a layoff was to implement a four-day workweek. That spread the pain evenly among all employees. George called his executive team together to tell them the bad news and to get the necessary action underway.
Next, he went to discuss the issue with union leadership. The regional head of the union-also the local steward-was in George’s office before lunch with a stern look on his face. “Look, George, you’re the new kid on the block, so we don’t think this setback was your doing. No one likes to lose part of their paycheck, but your plan treats management the same as the blue-collar workers, so you’ve got our support. We want to give you a chance to act. If we don’t like what you’re doing, we’ll be back. ” The four-day workweek was implemented.
Without being told, the entire management staff knew that they got four day’s pay, but they were expected to be there five. After about six weeks, the lower costs began to kick in, and ACI was again holding its head above water… barely. Then, George’s worst fears began to unfold. The lack of demand from Alcatel was now spreading to his other customers and, although they didn’t cancel their backlogs, they significantly reduced them. The customers’ forecasts reflected the same story. Like it or not, George could no longer avoid a layoff. His best calculation was that 900 people would have to go.
The remainder would go back on a five-day week. But a lot more details had to be worked out. What projects should be cut? What parts of the organization should be hit the hardest? Who should be protected? Discussion Questions 1. When George moved to the four-day workweek scheme, should he have expected his managers to work five days for four days’ pay? 2. Should George tell anyone except his immediate staff about the impending layoff before the details have been worked out? What about the board of directors? The union? The employees? CASE STUDY #6 (SHOULD COLLABORATE WITH #5)
The Case of Bad News (Continued) The Mike Wallace Factor and the Common Good George decided to be open about the impending layoff with all the important constituencies even though the implementation details were not worked out. That evening as he left his office for the day, George was surprised to see that a television crew had set up their camera near the main entrance and were talking to employees as they left. As soon as the reporter spotted him, the crew raced over and thrust a microphone in his face. “We understand that there are going to be layoffs at this plant.
What is your comment? We hear that the plants in Mexico and Scotland are not going to be hit as hard as the Irvine plant. Aren’t you just using this layoff as a way to export jobs to lower-wage countries? Don’t you owe it to the American workers to let them keep their jobs so long as there are foreign workers to be laid off? ” George made a few comments that set the matter in perspective. Although still skeptical, the press grudgingly conceded the argument… for the moment. When he got to the parking lot, he found that his car had been slashed.
The paint job was ruined. As he drove home, he thought, These problems are not my doing. If the managers and workers had paid more attention to quality, they might not have been hit so hard by order cancellations. The layoff was going to happen the next Tuesday, and he scheduled an all-hands meeting for the remaining employees. Did he ever have things to say to them! The next six months were the roughest of George’s career. But things started to click, the industry was coming back, and the organization had fixed the quality problems.
Best of all, the new product, which used technology that was a generation ahead of the competition, was moving along at lightning speed. They would have it to market by his first anniversary. As George reflected on the past year, he realized he had learned a lot. Two years later, ACI was the most profitable company in its sector. It felt like a rebirth, for George as well as for the company. Discussion Questions 1. Was George’s decision to be open about the impending layoff the ethical thing to do? Are there situations in which it is best to try to keep a lid on such information?
2. The particular jobs cut at ACI were chosen on the basis of the long-range interests of the business and not on the nationality of the work force. As the reporter’s questions implied, shouldn’t American businesses favor American employees over foreign employees? What do you think George said to the TV reporters? CASE STUDY #7 The Case of Nutritional Foods By Kirk O. Hanson What do we do when products go wrong? That question was explored by the Ethics Center’s Ethics Roundtable for Executives at a September meeting featuring Greg Steltenpohl, chair of Odwalla Inc., and Kirk O.
Hanson, director of Stanford University’s Sloan Program at the Graduate School of Business. To facilitate discussion of the issue, Hanson created the following fictitious case. It does not represent a real event, but it does provide a framework for looking at questions of product responsibility.
The case is presented in four parts to mimic how such a scenario might evolve in real time. At each break in the case, stop and ask yourself what you would do given the information you have. First Warnings Fred James, chief executive of Nutritional Foods Inc., a $50 million manufacturer of healthful foods, listened with concern as John Healy, his vice president for production, described reports that had come in during the past hour.
The reports came from two county health departments, one in Seattle and the other in Southern California. In each case, the health department official reported a possible link between acute food poisoning of a child and an unpasteurized apple product produced by Nutritional Foods and distributed throughout the Western United States. The health departments had not yet ruled out all other possible causes.
Additional information was not yet available, and Healy did not have batch numbers for the products in question. Nutritional Foods was rapidly becoming the best-known brand of natural or nonpasteurized foods in the Western United States. It made its products in two facilities, one in California’s Central Valley and the other in a coastal city of Central California. Fresh fruit and vegetable products were shipped from growing regions throughout the West to these two facilities for processing and canning or bottling.
The handling of nonpasteurized products was critical as contamination could occur in picking, transporting, or processing the fresh product. Distribution was also critical to the freshness and safety of the company’s products. Daily distribution from the company’s processing facilities in company-owned refrigerated trucks ensured freshness. Unpasteurized products had been popular in the health-food market for many years, but Nutritional Foods was the most successful of several companies seeking to appeal to the mainstream market as well as to the niche consumer.
The company’s success had led to its rapid growth and the construction of its new processing facility in the Central Valley. “OK, John,” said James, “what’s our response? Do two ‘maybes’ mean we should do something immediately? We have had an occasional report, perhaps one every couple of months, during the past two years. None of those turned out to be traceable to our product. Do two reports represent anything other than a statistical quirk? Should we be doing anything but waiting for the final reports from the health departments in a couple of days? ” Concern Deepens.
Healy dispatched company managers to the two counties where initial reports indicated there might be acute food poisonings related to one of the company’s unpasteurized products. He was startled a short time later to receive a third and fourth report similar to the first two. Case Study #7 Although also not conclusive, the new reports made Healy wonder if something was terribly wrong. Healy immediately dispatched company managers to the two new counties, urging all four to get the batch numbers of the products in question. He also asked for an immediate meeting with James. “Now what should we do?
” asked Healy. “Should we warn the retailers, asking them to stop selling the product? Should we also warn the public? Such a move could devastate the company’s reputation and its stock price at a critical moment. Don’t we have an obligation to think long and hard before we take that step? How much certainty must we have and how serious does a problem have to be for us to proceed? ” Time to Act? Healy was deeply troubled when he heard from his managers that health officials in the four counties they visited were virtually certain Nutritional Foods’ product was indeed involved in the food poisonings.
All the batch numbers, however, were not available. The two cases where company managers could get batch numbers were from a single day’s production. Healy was further troubled that three additional reports of possible food poisonings had come in by the end of the workday, though two were relayed by newspaper reporters. Each was checking claims by consumers that one of Nutritional Foods’ products had made them sick. One of the reports involved a different company’s products. Healy also heard late in the afternoon from one of his children who had read in an Internet nutritional chat room that Nutritional Foods had a poisoning problem.
Had the time come, Healy wondered, for more dramatic action? If so, what action should he take? Crisis At 7 p. m. , Nutritional Foods announced publicly and through its retail network that it was pulling all batches of the unpasteurized product associated with all but one of the alleged poisoning incidents. Once the news hit the wire services, 50 more calls cascaded into company headquarters late that night and early the next morning. Most were from consumers alleging they, too, had been poisoned by the company’s products.
Five more were reports from health professionals who stated they were treating possible poisonings. At 9 a. m. the next morning, James convened a meeting of his Crisis Action Committee, an ad hoc group of managers that had been formed a few months earlier for just such a crisis. “Let me put several questions before the group,” said James. “Are we doing enough by conducting a recall for the specific product in question, publicly asking consumers to return all unused products to their local retailer, and asking retailers to stop selling and return all of their supply to us?
The press has done a pretty good job getting the word out. It’s on the front page of perhaps 80 percent of the daily newspapers in our distribution area this morning. “Should we do more to notify customers? Should we consider pulling all our products? The calls this morning allege adverse reactions from many different products. “And what should be our strategy toward those who have been made sick by our product? If we show concern, isn’t there a risk we will look like we are admitting liability? Finally, what should we do about the sickest of those affected?
Two children are reported this morning to be in critical condition. ” If you were Fred James, what action would you take? Case Study #8 The Case of the Performance Appraisal Frank became chief financial officer and a member of the Executive Committee of a medium-sized and moderately successful family-owned contracting business six months ago. The first nonfamily member to hold such a position and to be included in the Executive Committee, he took the job despite a lunch-time remark by the company’s CEO that some members of the family were concerned about Frank’s “fit with the company culture.
” But the CEO (who is married to the daughter of the founder of the company) said he was willing to “take a chance” on Frank. Soon after Frank started, the company decided for the first time to “right-size” (a euphemism for downsize) to respond to rapid changes in its business. Frank, who had been through this before when he was a senior manager in his previous company, agreed this was good for the long-term health of the 20-year-old company. He decided not to worry that family members seemed more concerned about their own short-term financial interests.
Besides, the CEO was relying on Frank to help him determine how to downsize in an ethical manner; the CEO said he trusted Frank more on this than he did the head of his personnel department, who had “been around a little too long. ” On Frank’s recommendation, the company decided to make its lay-off decisions based on the annual performance appraisal scores of the employees. Each department manager would submit a list of employees ranked by the average score of their last three appraisals.
If the employee had been with the company less than three years, if the score for two employees was identical, or if there was some extraordinary circumstance, the manager would note it and make a decision about where to rank the person. At some point, Frank and the Executive Committee would draw a line, and those below the line would be laid off. As Frank was reviewing the evaluations, he was puzzled to find three departments in which the employee at the bottom of the list had “N/A” where the evaluation score should have been written.
When he asked the managers to explain, they told him these employees had been with the company almost since the beginning. When performance appraisals had been instituted six years earlier, the CEO agreed to the longtime employees’ request that they keep receiving informal evaluations “as they always had. ” The managers told Frank they’d questioned this decision, and the CEO had told them it wasn’t their problem. When Frank raised this issue with the CEO, he responded, “Oh, I know. I haven’t really evaluated them in a long time, but it’s time for them to retire anyway. They just aren’t performing the way they used to.
The company’s been very good to them. They’ve got plenty of retirement stored away, not to mention the severance you’ve convinced me to offer. They’re making pretty good money, so cutting them should let us lower the line a little and save jobs for some of the younger people–you know, young kids with families just starting out. And don’t worry about a lawsuit. No way they’d do that. ” “Do they know they’re not performing well? ” Frank asked. “I don’t know,” the CEO responded. “They should. Everybody else in the company does. ” Case Study #8 As they walked to the door, the CEO put his arm around Frank’s shoulder.
“By the way,” he said, “you should know that you’ve won over the Executive Committee. They think you are a terrific fit with this company. I’m glad you talked with me today about these three employees. You got it right: This is a company that cares for its employees–as long as it can and as long as they’re producing. Always has, always will. ” Frank left the CEO’s office with the vague feeling that he had some moral choices to make. Does he have an ethical dilemma? What’s the right thing to do? If he disagrees with the CEO, how does he protect his own career and the interests of his own family? What do you think?
This case was written by Thomas Shanks, S. J. , Executive Director of the Markkula Center for Applied Ethics. Summer 1997 Case Study #9 How Much Should Community Values Influence Land-Use Decisions? With unemployment at an all-time high and 50 percent of the downtown shops vacant, Tony Pell, mayor of Weldon, had been working with a regional business-development agency to revitalize what most locals called “the dead downtown. ” So when a restaurant chain inquired about opening at the location of a closed steak house, the good news spread fast. But as soon as identity of the restaurant was revealed, the celebration ended.
“Why would be want to welcome ‘Cahoots’ to our town? ” asked the president of the Chamber of Commerce. “I don’t want to say no to any new business, but a restaurant that looks and feels more like a Las Vegas casino is not what we want in our town. ” Brian Petrillo, regional vice president for the chain, came to the city council meeting when the item was first agendized to calm the critics and promote the project. ‘”The demographics for our restaurant are perfect for a town of 50,000,’ he explained. “Two Cahoots have opened recently in the region, and the synergy is really going to be to your advantage.
” Although few at the council meeting had actually visited the chain, many had seen television ads for the two new locations and were quick to criticize its “tawdry” bar and dining room. “Our interior decor reflects our philosophy – folks should have fun with their dining experience. We believe our theme draws customers but our food keeps them coming back,” explained Petrillo. Michelle Kennedy, chair of the city planning commission, was one of many who came up to the podium to speak. “I was shocked when our family entered the restaurant while on a recent vacation.
The young waitresses were in scanty costumes that made them look and act more like bar wenches than meal servers. The music was loud, and there was a large stage in the middle of the dining room, so we couldn’t avoid watching the ‘dancing. ’ We couldn’t get out of there fast enough. ” Kirk McGuire, owner of several vacant properties downtown said a new restaurant would be a boon and would draw customers as well as other businesses. Several other business owners agreed. “That building that been vacant for five years—it’s past time to turn it into a chain like Cahoots.
Besides, if we say no they’ll take their restaurant to a business-friendly town down the road. ” “We need to make sure that all parties get the facts and make sure the city council makes its decision based on good land-use planning rather than relying on emotion and hearsay,” cautioned the mayor. “ So I am recommending a subcommittee of downtown property owners and retailers who will meet with the city manager, city planner, and police chief. The applicant will prepare a presentation and the subcommittee will issue a report at a joint meeting of the planning commission and city council.
We’ll make sure there will be plenty of time for the public to speak. ” “We all have our own personal preferences,” explained the city manager, “but we cannot let those individual opinions jeopardize the revitalization of our downtown. ” Case Study #9 Discussion questions. Please post your responses in the comment section. • If Cahoots meets all the zoning, parking, and other land-use planning requirements, is it fair for the city council to deny their application?